Tuesday, July 7, 2020

QUESTION 11: How Can Executive Sessions Help the Board Own Up?

Spoken Words and Unspoken Thoughts

Are you familiar with “Kim’s Rule of Committees?” It’s in the witty book by Arthur Bloch, Murphy’s Law Book Three: Wrong Reasons Why Things Go More!

“If an hour has been spent amending a sentence, 
someone will move to delete the paragraph.”

I’ve often shared my “Murphy’s Law” with CEOs (waiting anxiously outside the boardroom during an executive session): 

“There is no relationship between the actual length of an executive session and the substance of the governance work actually accomplished in that session.” 

QUESTION 11 of 14: How Can Executive Sessions Help the Board Own Up? Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan (Order from Amazon)

While Ram Charan calls the executive session “the single most important innovation in corporate governance to date,” this closed door meeting of the board—without the CEO or staff in the room—is a delicate dance.

And caution! If your board chair is inexperienced or inept at leading an executive session, prepare for the worst. Your organization would never thrust a staff member into a critical role without coaching or mentoring (or at the least—reading something!)—yet boards venture into executive sessions often inappropriately prepared.

So…here are two resources. First, read Chapter 11 in Owning Up and be forewarned: “…if executive sessions are not run well, they can undermine trust and clog the flow of information and ideas, which makes it harder for the board to do its job.” Charan weighs in on the best time for executive sessions (he prefers before a board meeting), why the CEO should be in the room at the beginning of the session, and how to “loop in” the CEO after the executive session. 

My guess—this might be the first time you’ve read 11 pages on effective executive sessions—the good, the bad, and the ugly.

Second, read Lesson 17, “Botched Executive Sessions Are Not Pretty,” in More Lessons From the Nonprofit Boardroom, by Dan Busby and yours truly. (Click here to read the six-page chapter.) We recommend seven principles:

PRINCIPLE 1: An executive session without the CEO should never include issues that are of a non-sensitive nature. 

PRINCIPLE 2: A board should always meet in executive session in at least two situations: (1) when considering the CEO’s periodic review, and (2) when reviewing the CEO’s compensation. 

PRINCIPLE 3: Board meetings should rarely be conducted unless the CEO is included in the meeting. 

PRINCIPLE 4: The CEO should generally be present at the beginning of an executive session. 

PRINCIPLE 5: Following an executive session, the gist of the discussion should be communicated to the CEO in a constructive manner. 

PRINCIPLE 6: During the executive session, not every comment made by every board member will necessarily be appropriate or substantive. 

PRINCIPLE 7: If feedback to the CEO is not provided right after the session, it should be conveyed within a day or two so that the discussion is fresh in the minds of board members sharing the report. 

When the board chair (and perhaps another board member joining him or her) communicates the important content of the executive session to the CEO, they should remember John Carver’s wisdom, “The board speaks with one voice, or not at all.” Under no circumstances should comments or feedback from an executive session be attributed to individual board members. Anonymity is of utmost importance.

In addition to these two resources, we pray that it comes naturally to your mind and heart to add a third resource—God’s Word. Perhaps you’ll begin your next executive session with Psalm 19:14 (TLB): “May my spoken words and unspoken thoughts be pleasing even to you, O Lord my Rock and my Redeemer.” 

BOARDROOM DISCUSSION: “Just as the board needs an agenda, an executive session needs an agenda.” What should be on the agenda for our next executive session? When should we meet—before or after the regular board meeting?

• READ: Lesson 17, “Botched Executive Sessions Are Not Pretty,” in More Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson. (Click here to read the six-page chapter.) Click here to read Philip Boom’s color commentary on this lesson.

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